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County Grants Could Further Reduce OC Tax Rate

OCEAN CITY – The FY 2009 budget was passed in a 5-1 vote amongst the City Council this week, following an announcement from the Mayor regarding the potential for an additional drop in the proposed property tax rate.

Prior to the mandatory second reading of the budget Monday evening, Mayor Rick Meehan addressed taxpayers’ concerns over the increasing property taxes in the resort, announcing what he deemed to be good news on the contentious issue.

Meehan announced that with the passing of the county budget by the County Commissioners this week, the resort could be looking at close to $2 million more in grant money than was received last year, money that could be used to lower the property tax rate in the resort.

Resort officials presented the county with a report on tax differential last year. A report that reflected nearly $13 million in tax differential that town officials felt should be directed to the resort.

“We met with Worcester County staff and, of course, their analysis of the report was different than ours, but they did agree with some of the rationale behind the report,” said Meehan.

Despite efforts to garner funding in the form of a tax differential, the town was denied this year, receiving a letter from the county in early April, stating the commissioners were respectfully declining to implement tax differential this year.

Despite the setback, Meehan announced this week that the efforts were not done in vain, noting that the requests may have had an impact on the county’s decision to grant extra funding this year.

“It appears that our grant request, the amount of money we receive, is $2 million more than last year,” said Meehan Monday night.

Meehan proposed dedicating roughly $1.8 million of the grant money to the General Fund, a transfer that could yield a 1.5-cent decrease in the property tax rate from 39.5 cents per $100 of assessment to 38 cents. Meehan noted that the decrease would bring the town closer to the constant yield tax rate, 35 cents, than the town has been in a long time.

The remaining $200,000 would be used to address concerns over gas costs, as prices have increased nearly $1 per gallon since the budget was drawn up, and tax abatements, explained Meehan.

“This is an excellent opportunity to do something that we’ve all wanted to do,” said Meehan. “I think, in these particular times, this is a good tax rate for Ocean City.”

This came as a relief to Council member Margaret Pillas.

“This is wonderful news for our taxpayers. I’m really happy about this,” said Pillas, who voted against the budget on first reading, encouraging the council and town officials to find ways to cut back on spending.

Pillas explained that while the tax drop was a good move, she would still vote against the budget, “because we didn’t cut, we received revenue.” Council member Nancy Howard was not in attendance, hence, the 5-1 vote.

Despite the potential for a decrease in the property tax rate, a few citizens were present to voice complaints over taxes that they still deem to be too high.

City Manager Dennis Dare pointed out that before the budget even reached the council level, $4.5 million had already been cut.

“There wasn’t anything frivolous at all,” said Dare. “There are a lot of external things that affected us.”

Council President Joe Mitrecic took exception to the criticism.

“I think this is a responsible budget. I think we’ve made the cuts where we needed to make cuts. We’re down to bare bones with this budget,” said Mitrecic.